Antiques R Us is a mature manufacturing firm. The company just paid a dividend of $12, but

Question:

Antiques R Us is a mature manufacturing firm. The company just paid a dividend of $12, but management expects to reduce the payout by 4 percent per year, indefinitely. If you require a return of 9 percent on this stock, what will you pay for a share today?

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...

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